EDITORIAL: Telling Tales About TABOR, Part Five

Read Part One

In November 2018, Colorado voters had a chance to put themselves — and their state government — even more deeply in debt to maintain their highways, when we were presented with Proposition 109, also known as “Fix Our Damn Roads.” Proposition 109 would have authorized $3.5 billion in bonds, with proceeds to be used exclusively for road and bridge expansion, construction, maintenance, and repair of specific statewide projects. The principal and interest on the borrowed money would have been paid out of the state budget — no new taxes — and the borrowed money and interest would have been excluded from the state’s TABOR spending limit.

I’m sure bond investors would have been delighted with the arrangement. The total repayment amount would have been $5.2 billion, providing investors with a profit of about $1.7 billion.

The voters wisely rejected the offer — influenced, perhaps, by $7.4 million in campaign expenditures opposing the bond measure. (The proponents of Proposition 109, by comparison, raised about $770,000 in campaign contributions.)

At the same election, the voters also turned down Proposition 110, which would have increased Colorado’s sales tax rate from 2.9 percent to 3.52 percent for 20 years, generating an estimated $767 million a year for transportation. Roughly $115 million a year would have been dedicated to transit, bike paths, sidewalks, curb cuts, and operating expenses. The measure would have allowed the state to borrow up to $6 billion for transportation projects. If it had been approved by the voters, the total repayment would have been up to $9.4 billion — meaning $3.4 billion in interest payments.

Another disappointment for wealthy investors.

We have various perspectives on Colorado’s troubled roads and highways, probably as many different perspectives as there are voters. One thing most of us agreed upon, in 2018, was that a total of $9.5 billion dollars in new debt — plus $5.1 billion in interest due on the debts — was probably not the best approach to maintenance and expansion of our highway system.

The 1992 TABOR amendment — the Taxpayers Bill of Rights — was the reason we had a chance to vote on these high-debt proposals. In a representative government, the voters rarely have a direct say in how our money gets spent, and how much debt we get burdened with. Normally, the best we can do is vote for this or that candidate, and pray that we don’t get screwed. Often, the choice of candidates leaves us voting for the one we dislike the least.  But in Colorado, we’re occasionally asked our opinion directly, in cases where General Assembly wants to increase our taxes or debt.

Colorado voters rarely approve higher taxes, but it happens now and then. In 2018, the Archuleta County voters approved a sizable increase to their property taxes on behalf of the Archuleta School District, to increase teacher salaries, pay for school police officers, and fund full-day kindergarten for all interested families. (A portion of the money accrues to the District-authorized charter school, Pagosa Peak Open School.) At the state level, we approved Referendum C in 2005, which allowed the state government to spend in excess of TABOR limits for five years, and also reduced the “racket-down” effect of TABOR as originally approved in 1992. Referendum C resulted in a permanent tax increase.

State spending in 2005-2006 was about $21 billion; by 2016-2017 it had grown to $37 billion.

Here’s my own perspective on highway funding:

A little more than half of funding for Colorado’s highway system comes from the Highway Users Tax Fund, HUTF, which totals around $1 billion a year. That money comes from motor fuel taxes (22¢/gallon for gasoline, and 20.5¢/gallon for diesel), vehicle registration fees, and other sources like driver’s license fees and fines. The state distributes about 35% of that money to cities and counties, and uses the rest for CDOT (Colorado Department of Transportation.) Another $500 million or so comes from the federal government, and various other sources provide maybe $320 million.

It’s never enough money.

Chart courtesy 'Building a Better Colorado.'
Chart courtesy ‘Building a Better Colorado.’

We could reasonably look at our highways and roads as something everyone benefits from, and something that everyone should pay for, equitably. Instead, Colorado has a system that collects taxes based mainly on the number of miles you drive (22¢/gallon gas taxes) and the price of your car (annual vehicle registration fees).  I don’t have an opinion as to the “fairness” of either taxing scheme, but we know that 20 years ago, the state was collecting about $428 million in gas taxes, and in 2017 the amount was about $510 million.

We also know the last time the General Assembly had the courage to ask voters to increase the gas tax was back in 1991.

Alternately, we could reasonably look at our highways as a bureaucratic system run amuck, one that we never could afford in the first place and that’s destined to cause us financial heartburn forever into the future. (Until we develop flying cars, that is.)  The experts at CDOT claim they really need an extra $1 billion per year to maintain and expand our highway system properly.  Such funding would require a gas tax of about $56 cents a gallon, which is close to what car owners pay in Pennsylvania.

But I don’t think that would solve the problem.

Between 1970 and 2010, the Archuleta County commissioners accepted about 250 miles of new roads into our local road system. Former Public Works Director Ken Feyen told the BOCC, a few years ago, that our road maintenance budget is about 1/3 of what’s actually needed to maintain all our roads.  We can’t afford what we’ve allowed to be built.

I suspect the entire state of Colorado has done essentially the same thing: built out twice or three times the number of highway lane-miles we’re willing to pay for.

In the last two long-term transportation reauthorizations, US states were given increased flexibility to spend federal dollars. Despite long-standing complaints about potholes, crumbling roads, and unfixed highways, states spent as much building new roads as repairing old ones, investing $120 billion into expansion in the five years between 2009 and 2014.  More roads that we can’t afford.

There’s no clear solution to this problem. But we could begin to address it, if we would simply stop building new roads.  Get off the treadmill. Focus on fixing what we already have.

I somehow doubt CDOT would see that as a reasonable starting point.  I doubt any government agency can see “no growth” as reasonable.

Recent wage data released by the Colorado Department of Labor and Employment shows the median wage in Colorado grew by 3.5 percent, increasing from $19.66 per hour in 2017 to $20.34 in 2018. But if we adjust for Colorado’s 2.7 percent inflation rate during 2018, the inflation-adjusted “real” wage growth was only 0.8 percent. This comes on top of 2017 when real median wages declined by 0.4 percent, when Colorado’s 3.4 percent inflation rate more than wiped out a 3 percent growth in wages.

Our government agencies may think they need more (and more) money. But you can’t get blood from a turnip.

Bill Hudson

Bill Hudson

Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.